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When a PFA goes beyond the call of duty

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When a PFA goes beyond the call of duty

By Ikechukwu Amaechi

When the Nigeria Police Force, NPF, Pensions Limited came on board six years ago, the idea was to have a Pension Fund Administrator, PFA, exclusively responsible for pension assets of all police personnel, according to the Pension Reform Act, PRA 2014.

Coming after 20 other PFAs had been up and running, it was not going to be easy. But it was a child of necessity. Before 2014, policemen were scattered in all the other 20 PFAs before the police authorities requested an exemption from the contributory pension scheme.

But the Federal Government demurred, insisting that the police institution was so big that it was not in the best interest of the country to let policemen out of the pension loop.

So, NPF Pensions Limited was a compromise whereby instead of letting the police exit the pension scheme, the National Pension Commission (PenCom) in 2014 licensed a PFA exclusively dedicated to serving the police with a vision “to be the benchmark in Pension Fund Administration in Nigeria”.

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Its mission: “To provide quality customer and financial advisory services to stakeholders and adopt investment strategies that would yield the best possible returns on their pension assets”, was even more ambitious.

Tapping Dr. Hamza Bokki, a man with decades of experience in investment banking, corporate governance and human resource management, to be the pioneer managing director was, in itself, a bold statement.

It was going to require a team prepared to think out of the axiomatic box to successfully manage the pension assets of about 370,000 policemen.

Six years after, the jury is in that despite the constraints, NPF Pensions has largely delivered on its mandate.

Prior to its establishment, a large number of policemen on the contributory pension scheme were neither receiving statements on their Retirement Savings Accounts, RSA, nor had any communication with the PFAs, and, therefore, didn’t know what was happening to their accounts.

So, the first task of the new PFA was to get in touch with their clients by locating policemen wherever they were in Nigeria. Offices were set up in all the 56 police formations and commands across the country.

Working also through the police pension offices and six regional offices with pension desk officers, NPF Pensions took their services directly to the officers wherever they are located.

To ensure that issues are addressed instantly, all the 62 offices are online, real-time. The result is that whatever the management is doing at the head office, the representatives can equally do on the field.

It was a strategic move that not only eased the access of police officers to information but also dramatically eased the stress of documentation by creating awareness.

Any other PFA would have been contented with the structures already put in place but not one to which going above and beyond the call of duty in satisfying its clients has become an article of faith.

Thus NPF Pensions initiated annual pre-retirement seminars for retirees. The 2020 edition kicked off in Lagos (South West) on Monday, February 3 and later moved to Port Harcourt for the South-South zone.

Next week, the train will move to Kano (North West) and Owerri (South East) before anchoring in the North East and North Central. Going by the response from the audience in Lagos, the seminars will achieve the purpose.

Retiring police officers asked the questions that most concentrate their minds. The idea, Dr. Bokki explains, is to prepare police officers that are due to retire in 2020 by interacting with them physically to acquaint them with their rights, entitlements, and obligations before and after retirement.

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To access their pension funds after retirement, they must have completed Data Recapture Exercise, DRE, and other National Pension Commission (PenCom) verification exercises.

Many policemen wait until after their exit from service before embarking on the documentation. Of course, this delays the payment of pension.

But despite all these proactive moves, there are still issues, the main elephant in the room being the delay in the payment of pension to retired officers due to the inability of the government to release the accrued benefits of the retirees since January 2019.

The contributory pension scheme comprises 7.5 per cent deducted from the salary of a public servant and the counterpart 7.5 per cent contributed by the employer, which in this case is the government and the accrued rights, derived from the service such an officer rendered from before the time of enrollment in the pension scheme.

So, while the deductions and contributions are paid monthly into the RSA and officers get their statement of account every month, the accrued rights are only paid by the government when an officer serves notice of retirement.

The Board of NPF Pensions Limited approved an N400 million annual Retiree Resettlement Support Scheme in 2017 to cater to retirees while awaiting their pension.

Colossal as this sum is, it was still scaled up to N450 million in 2018 and it is paid retirees gratis to alleviate their suffering. Explaining the reason behind the move, Dr. Bokki said, “It is a corporate social responsibility scheme that NPF Pensions has instituted. It is coming from our own internal funds.

From the income we make, we expend N450 million and give it free to police officers.

“No other PFA is doing that and this is because we have a unique constituency. Most of the police officers live in the barracks and if there is any delay in the payment of accrued rights, they go into distress as soon as they leave service.” But even when the pension is eventually paid, the amount is so paltry. Most of the officers at the pre-retirement seminar in Lagos lamented very low balances in their accounts.

Dr. Bokki said it is because “historically, police salaries have been low”. And since pension is a function of contribution, it has to be paltry because the salaries from which the contributions are taken are low.

Culture of savings

Here again, NPF Pensions, going above and beyond the call of duty, has appealed to the government to pay police retirees a separate gratuity for services rendered to country so that they can be brought at par with colleagues and peers in the public service.

The appeal, fully supported by the police apparatchik, is pending before the Presidency. But NPF Pensions is doing a lot more than advocacy.

Many policemen tend not to give a thought to life after retirement when they are still in service. There is no preparation for the day which will surely come after either 35 years in service or on the attainment of 60 years of age.

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Living in the barracks, most policemen lack the culture of savings and while in service, they hardly can afford the time to develop other competencies that will put them in good stead when they drop their uniform due to demands of the profession.

The consequence is that life after retirement becomes a drudgery at best, or at worst a death sentence, literally. Here again, the PFA steps in. The seminar partly addressed this fundamental issue.

“We have been trying to prepare the policemen to say, retirement is real, start early to prepare for it. At least five years, ten years before retirement, you should start planning.

“Where do you plan to live after retirement? What are you going to do in retirement? You cannot just sit down doing nothing because, after retirement, you are still useful to your country, you are still useful to your community. You can engage in a lot of lawful things in retirement.

You can engage in farming, in training, in consultancy services, whatever you want to do,” Dr. Bokki said in Lagos. That message will resonate across the country in the coming weeks as the pre-retirement train moves nationwide.

The good thing, as Bokki noted, is that the message is beginning to sink in. “Most of them are listening now,” he enthuses.

vanguard

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